Valley agency works to save Pennsylvania jobs

Rebound at Schulmerich is thanks to SEWN - or the Strategic Early Warning Network - a program funded by the U.S. Department of Labor.

Rebound at Schulmerich is thanks to SEWN - or the Strategic Early Warning Network - a program funded by the U.S. Department of Labor.

Anthony SalamoneOf The Morning Call

Agency works to save Pa. manufacturing jobs.

When ownership at Schulmerich Bells changed hands two years ago, it was a struggling business with an outdated though picturesque hilltop location outside Sellersville.

Its building was 62 years old and had gone through several expansions, company President Ken Horen said, noting "We ended up with 26,000 square feet that was shaped like a giant 'J.' "

That's not all. Schulmerich was unsuccessfully run by a caretaker management team on behalf of a legal trust. When new owner Jonathan Goldstein took over in August 2012, it needed at least two things: cash and the means to streamline and retool the company back toward success.

Enter SEWN, for Strategic Early Warning Network, a program funded by the U.S. Department of Labor. In short, SEWNtries to save manufacturing jobs before they are lost.

In the case of Schulmerich, SEWN initiated the transaction and advised in the process that led to new investment dollars and a move to a more modern facility on Route 309 in Hilltown Township, about 4 miles south of its former location in West Rockhill Township.

Rebound at Schulmerich is thanks to SEWN - or the Strategic Early Warning Network - a program funded by the U.S. Department of Labor. (HARRY FISHER / THE MORNING CALL)

Though employment is down to 16 — Horen said there had been as many as 42 workers as recently as a few years ago — he said the privately held Bucks County company is profitable. It hopes to reclaim and expand on its share of the niche market for its hand bell sales and service.

Horen also said the company is trying to broaden its markets overseas, establishing service centers where people are trained to handle Schulmerich products.

The rebound at Schulmerich is something SEWN officials have seen happening in the 20 years of the program's existence. In recent years, the program has extended statewide. For the Lehigh Valley, the network in September hired a new director, Gary A. Wickham. Last month, he moved into a new northeast regional office in Bethlehem.

Steel Valley Authority, an organization that developed and administers SEWN with the Pennsylvania Department of Labor and Industry, started the program in 1993 in the western part of the state.

Wickham, who spent decades as a corporate turnaround specialist, calls SEWN "the best-kept secret in Pennsylvania."

SEWN provides a wealth of guidance to manufacturers employing between 25 and 500 workers. Its services include financial restructuring, labor-management relations and buyouts. The last assistance includes providing companies with resources to investors, as well as new management and business plans.

The program is free to manufacturers, according to Wickham.

Lehigh County has 500 small manufacturers, said Wickham and Jack Pfunder, CEO of Manufacturers Resource Center in Hanover Township, Lehigh County. Pfunder estimates Northampton County has about 400 manufacturers.

Horen, a member of the Greater Lehigh Valley Chamber of Commerce's Small Business Council, said the chamber calculates there are about 2,500 manufacturers in its four-county territory.

Wickham, who previously served as CEO during the turnaround of the former New Jersey Zinc Co. in Palmerton — now part of Horsehead Corp. — said SEWN chose to move its regional office to the Lehigh Valley from Wilkes-Barre in large part because of the area's growth in manufacturing.

Of the 16 counties in his territory, Wickham said Northampton and Lehigh are only matched by Potter and Tioga counties in the state's northern tier for growing manufacturing jobs. But the Valley has also experienced greater population growth, he added.

Still, challenges remain. The Valley has seen a 17 percent drop in the number of manufacturing employees during the last 10 years. Approximately 35,000 people work in manufacturing in Northampton and Lehigh counties, according to data provided by Wickham from the U.S. Bureau of Labor Statistics. In 2004, the number stood at slightly over 42,000.

While area unemployment has hovered around 6 percent — it dipped to 5.8 percent in September, the lowest level since August 2008 — big manufacturing has lagged, experts say.

Business development leaders can point to Air Products in Lehigh County and Crayola LLC and Majestic Athletic in Northampton County as symbols of continuing the legacy of large manufacturers, but the area needs more industrial occupations, in Wickham's view.

"Many of the jobs that are added," he said, "while the area is thrilled to have them, they're not high-paying, manufacturing-type jobs that require skilled workers and are able to foster a viable middle class."

Manufacturing jobs, which Wickham estimates pay $20 to $25 per hour, "put the middle class on the face of the map, and they were long-term jobs."

Pfunder, who heard about SEWN about five years ago when it began migrating to the eastern end of the state, calls the program valuable to any manufacturer who might be floundering.

"It's definitely worth the time and energy for companies that are having a cash flow problem or are down in the market," he said. "We're giving them companies earlier."

The move to Bethlehem also is close to Wickham's home. The Upper Saucon Township resident lives with his wife, Donna Wickham, who grew up in Salisbury Township. He said moving the office from Wilkes-Barre to the southernmost reaches of his territory should pose no impediment in working with businesses in the northern reaches of the state.

Horen said he has offered his help to other small manufacturers through SEWN.

"It's been good working with them," he said of SEWN officials. "With the streamlining of the business, we feel really good about this year and next year, and what we're doing."

•What it does: SEWN responds to troubled and targeted businesses, providing diagnostic assistance to determine causes of distress. It also looks for ways to restructure, turn around or attract buyers for troubled businesses.

•Roots: It was started in 1993 by Steel Valley Authority, an agency based in the Pittsburgh area.

•Worth bragging about: In the last five fiscal years, from 2009-13, SEWN estimates it averted the potential loss of 5,300 jobs. The state says this has added a "positive impact" of more than $1.5 billion and prevented the payout of more than $34 million in unemployment compensation benefits.